'Psycho-Acoustic' Beatles Recordings Cost BlueBeat $950,000

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'Psycho-Acoustic' Beatles Recordings Cost BlueBeat $950,000

BlueBeat.com, the company that tried to sell "remastered" Beatles tracks online before they became officially available, has agreed to pay nearly $1 million to settle a lawsuit filed by three music labels. The move comes more than a year after a federal judge issued a restraining order and then an injunction against the company, and does not yet include any attorney's fees or other damages involved in the lawsuit.

The case dates back to 2009, before the (now infamous) Beatles remasters were actually authorized to be sold online. When BlueBeat and its parent company Media Rights Technologies (MRT) first posted the songs for only a quarter per track, it was widely believed there were some shenanigans going on, sparking the lawsuit from EMI, Capitol Records, and Virgin Records America.

Soon after the lawsuit was filed, BlueBeat and MRT came forward with what can only be described as a bizarre legal defense: MRT claimed it was not violating any copyrights, because it actually controlled the copyrights for the music it sells. "I authored the sound recordings that are being used by psycho-acoustic simulation," MRT boss Hank Risan wrote in an e-mail to the RIAA. "Psychoacoustic simulations are my synthetic creation of that series of sounds which best expresses the way I believe a particular melody should be heard as a live performance."

In fact, MRT attempted to register for copyright protection on the "psycho-acoustic simulations," despite the fact that they were copied from the original Beatles recordings. Judge John Walter was not amused by the legal runaround — calling Risan's defense "technobabble and doublespeak" — and eventually slapped BlueBeat with a restraining order. The order was followed up later with an injunction that resulted in the tracks being removed from BlueBeat's website.

Now, BlueBeat and MRT have agreed to shell out $950,000 to the music labels in order to settle the case. As part of the settlement, the companies must immediately cease reproducing, distributing, publicly performing, or linking to any copyrighted works — not just the Beatles' songs — controlled by any of the record labels involved in the case. BlueBeat has also agreed not to appeal the judgment, though the door remains open for further damages or contempt sanctions that happened after the last injunction, not to mention any additional fees that the record companies can think of.

With this settlement, BlueBeat is narrowly avoiding the summary judgment that was expected to land on Tuesday of this week. Meanwhile, BlueBeat's website seems to be up to some of its old tricks by offering songs by other, non-Beatles artists. "You are listening to fully-licensed simulated performances," reads the page, followed by a 2011 BlueBeat copyright notice.